IT firms may see revenue drop up to 15% in June quarter 

The same holds true for mid-size or tier-II firms, where client concentration is across limited verticals and geographies.
For representational purpose. (Photo | EPS/R V K Rao)
For representational purpose. (Photo | EPS/R V K Rao)

BENGALURU: As major markets like the US, UK remained shut due to coronavirus pandemic in June quarter, FY21 and clients opted for reduced discretionary spending on technology, IT companies are likely to witness a 5-15 per cent revenue drop, show reports from brokerages. Analysts say that the worst may, however, be over for a majority of the IT service providers in the first quarter of FY21 and companies are expected to be on track of posting flat growth in Q2,  with further improvement from the September quarter as economies open up and clients bank on digital transformation and cloud adoption. 

With many companies in the US filing for bankruptcies, sectors like Oil and Energy, Retail, Hospitality 
remained the worst-hit, while Banking and Financial sector, Online retail, LifeSciences and healthcare were not as much impacted. Experts observe that the companies reliant on the worst-hit sectors  will post worse results than. The same holds true for mid-size or tier-II firms, where client concentration is across limited verticals and geographies.

On July 9, India’s largest IT services company, Tata Consultancy reported a 14 per cent loss in net profit to Rs 7,008 crore for Q1 FY21, surprising many analysts especially since the firm’s earlier results were better than peers in terms of deal wins and revenue growth.Consequently, Wipro and Infosys are likely to post worse results considering their revenue growth over the past few quarters did not match with that of TCS’s. 

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